I've just been...spending them and moving them to the supply. It seems like if a hero is revived using Princess Coins, then they get +1W Defense in Classic. Arcade it's just spent. Only noticed this b/c I was going through the eproofs and noticed the princess coins for classic have +1W Defense on the back.

SDE Classic 2.0 P21:

SPENDING PRINCESS COINSIf a Hero was destroyed during the turn, the party must spend one Princess Coin to bring a new Hero into play. Place one Hero model of the party’s choice adjacent to the Start Token or adjacent to any other Hero. The selected Hero may be any Hero in the players’ collection, it is not required to be the same model. If a different Hero is chosen to enter the game, the previous Hero’s equipmentand tokens (other than activation tokens) are discarded.

Place the spent princess coin on the Hero’s card. coin may not be used again, but the Hero gains +1W to all defense rolls for each princess coin on its card.

SDE Arcade 2.0 P33:

SPENDING PRINCESS COINSIf a Hero was destroyed during the turn, the party must spend one Princess Coin to bring a new Hero into play. This is always the final action taken during the power-up phase.

Place one Hero model of the party’s choice adjacent to the Start Token or adjacent to any other Hero. The selected Hero may be any Hero in the players’ collection, it is not required to be the same model. If a different Hero is chosen to enter the game, the previous Hero’s equipment and tokens are discarded.

Discard the spent Princess Coin, it may not be used again and has no further effect on the game.

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This also means the Ghost Pet has significantly lower value in Arcade b/c you don't get defense bonuses from Princess Coins.

Yeah, this rule has been around for a long time in the new stuff. It exists in classic so that the Consul can't hammer on a single hero with low defense to deplete Princess coins. Conversely it was taken away from the Princess coins in arcade to keep the players from creating an indomitable tank with a static defense higher than any monster's static attack.